In late March, around the US-Iran conflict, a subtle turning point in the narrative emerged: Trump repeatedly emphasized to his aides the need to avoid a prolonged war and to end the conflict as quickly as possible. This signal was conveyed to the market through The Wall Street Journal and Jinjidata. However, in stark contrast, Macquarie Group strategist Thierry Wizman warned that the conflict is likely to continue until mid-April, and expectations for a ceasefire are "premature." When the President's personal political desire for a "quick resolution" collides with the geopolitical realities and the military's timeline assessments, the core question for risk assets, particularly cryptocurrencies, becomes whether to bet on a rapid cooling or pay a premium for a longer period of uncertainty.

The President is eager to conclude but hits a geopolitical wall

According to reports from The Wall Street Journal and Jinjidata, Trump recently made it clear in internal meetings that he hopes to avoid it turning into a prolonged war and stressed the need to "end the conflict with Iran as soon as possible." This statement highlights the White House's concern that the conflict could burden domestic issues, and the market interpreted it as a signal of seeking an "off-ramp." However, from publicly available information, peace negotiations are still only in the early stages, with both sides primarily testing boundaries and rhetoric, and there is still a considerable distance to go before forming a specific framework, with key issues such as security guarantees and regional influence remaining difficult to reconcile.

In this context, Trump's political motivation to rapidly end the conflict is becoming increasingly clear. With the midterm elections approaching, inflation and the cost of living are the most direct pain points for American voters, as high oil prices and geopolitical uncertainty can quickly transfer to prices and consumer confidence. For Trump, continuing long-term military engagement overseas means greater financial burdens and public opinion risks; conversely, if he can conclude the conflict quickly without being seen as "weak," he has the chance to shift the narrative back to "revitalizing the economy and lowering the cost of living." However, as negotiations slow and the regional situation grows complex, the political desire for a "quick conclusion" easily clashes with geopolitical realities.

Macquarie bearish on peace: fighting while talking

In contrast to the "hope to end soon" tone from the White House, Macquarie Group strategist Thierry Wizman holds a notably pessimistic view on the prospects for peace in the Middle East. He bluntly stated that the current optimistic expectations for a Middle East peace agreement are "premature" because the fundamental divergences in core demands between the two sides are challenging to bridge in the short term, and there is no consensus foundation to support a quick ceasefire on issues such as ceasefire methods, security arrangements, and regional influence rebalancing.

According to Macquarie's analysis report, the conflict is highly likely to slip into a "fighting while talking" mode: on the one hand, political and diplomatic channels will remain open to ensure that the situation does not spiral completely out of control; on the other hand, substantial military actions will not immediately cease and may even escalate in phases. The time window indicated in the report is that military actions could continue until mid-April, suggesting that the market's prior bets on "quick cooling within a week or two" need to be reassessed. The report also notes that the US may intensify military operations in the next two weeks, using limited escalation to secure more favorable negotiating leverage, but this will also extend the entire uncertainty period, making it difficult for already strained risk sentiment to truly recede.

Votes, leverage, and the battlefield: Trump's threefold constraints

From Trump's public and private signals, his priorities are clear: domestic issues take precedence over foreign wars. The political clock brought by the midterm elections is rapidly counting down, with inflation and living cost pressures continuously occupying high positions in polls. In this context, long-term, large-scale military engagement overseas is not only challenging to convert into electoral gains but is also easily framed by opponents as evidence of "neglecting people's livelihoods," further compressing his political space for prolonged military actions overseas.

However, the reality is that the continuation of military actions serves another purpose: the pursuit of leverage at the negotiation table. Limited strikes and military presence can be used to enhance the US's bargaining power, sending a signal to adversaries that "the costs are still not high enough," thereby striving for more favorable terms on key issues like security arrangements and regional order. This creates an internal tension: on one side, there is the President's political demand for a "quick resolution," and on the other, the security and diplomatic systems hope to "exchange conditions for time and pressure," and these two are not always in sync.

The result is that the political clock at the White House is misaligned with the pace on the battlefield and in negotiations. Politically, there is a desire to provide voters with an account that "I have the situation under control" within a controllable timeframe, while military and diplomatic processes are closer to a path of "dragging, consuming, and probing." This mismatch itself leaves tremendous uncertainty for sudden policy shifts, unexpected escalations, or unforeseen concessions in the future, and is a key variable that markets cannot simply capture with straightforward linear expectations.

Geopolitical tensions intensify: cryptocurrencies under pressure

Since 2024, the cryptocurrency market has exhibited heightened sensitivity to geopolitical risks; whether from macroeconomic data shocks or escalations in regional conflicts, as long as they impact global risk appetite, the volatility of core assets like Bitcoin will be amplified. In a high-leverage, highly mobile market structure, any unexpected geopolitical news can trigger chain liquidations and emotional resonance.

In terms of investor behavior, this can be roughly divided into two typical scenarios: firstly, when risk aversion dominates, some funds may short-term flow into Bitcoin and other assets viewed as "digital safe havens", attempting to hedge against the uncertainties of fiat currency or traditional assets, which often leads to rapid surges followed by sharp retracements; secondly, when overall risk aversion rises, and the market begins to worry about global liquidity and economic outlook, a contraction in overall positions and deleveraging can instead place systemic pressure on cryptocurrencies, making prices more prone to unilateral amplification in a reduced volume environment.

Under the "fighting while talking" expectations outlined by Macquarie, geopolitical conflict is no longer a one-off "black swan," but rather a continuous "noise curve" that disturbs the market. This means that for cryptocurrencies, the impact will not be a rapid recovery after a single event, but rather a prolonged period of high volatility lasting weeks, filled with repeated news: every rumor of a ceasefire and every escalation of military actions will trigger a repricing of market expectations, leaving traders on edge and making it difficult to simply bet on a "bad news has been fully priced in" scenario.

The mismatched trading window: a tug-of-war between policy and market

On one side are Trump's direct and indirect signals of wanting a quick end—avoiding a prolonged war and concluding as quickly as possible; on the other side is the timeline given by institutions like Macquarie of "potentially fighting until mid-April." The gap between these two narratives constitutes a significant expectation mismatch interval. For a market that is used to seeking trading cues in policy signals, it is easy to oscillate between differing information sources: betting one minute that "the White House will suppress escalation and accelerate a ceasefire," only to be scared back into a defensive posture by predictions of "possible increases in military actions over the next two weeks."

This tug-of-war often manifests in the market as a cycle of emotional amplification—reversion—further amplification. Initially, the market may be more willing to believe the presidential rhetoric and peace aspirations, preemptively trading in optimism for "the conflict ending soon," causing risk assets to rebound driven by "the worst-case scenario not occurring"; but as real actions show an escalation, and negotiations make limited progress, traders are forced to pay higher risk premiums for longer uncertainties, leading to a reversal of previously excessive trades into peace expectations, resulting in price surges followed by sharp corrections or even flash crashes.

For the cryptocurrency market, the real difficulty in trading lies not in the direction of bulls and bears themselves, but in the timeline: once the script of "resolving within a few days" is rejected by reality, prices must re-anchor within the new framework of "weeks-long disturbances." This often means that initial attempts to bet on peace positions will face forced liquidations or passive reductions during the escalated actions, while the true risk compensation will appear after the market re-accepts the notion that "the conflict may drag into mid-April."

From the battlefield to the market: a realistic reminder for cryptocurrency traders

In summary, the core contradiction at present is very clear: on one end, Trump's political need to accelerate the end of the conflict arising from electoral votes, inflation, and living costs; on the other end, the geopolitical landscape and military-diplomatic realities naturally lean towards delaying time and trading off advantages through "fighting while talking." The misalignment between the two makes any linear script about "rapid ceasefires" seem overly optimistic.

For the cryptocurrency market, a more reasonable hypothesis is not "a ceasefire agreement leads to an instant zero risk premium," but rather accepting a "non-linear cooling" war path: military actions could alternately escalate and de-escalate, negotiations may fluctuate, and sentiment oscillates between extreme optimism and extreme pessimism, with volatility sources showing delayed and repetitive characteristics. In such an environment, simple bets on a singular point of "big news" are far less advantageous than proactively planning out the entire range of positions and risk management over the extended period.

Overall judgment is that: in the absence of a clear and credible ceasefire path, traders need to allow for sufficient position flexibility and risk budgeting for at least one to two trading months of geopolitical disturbances. This includes both psychological expectations of significant price volatility and pre-emptive designs regarding leverage ratios, liquidity distribution, and stop-loss mechanisms. The pace of the battlefield may not necessarily align with the political calendar, while the market's dramatic oscillations often precede peace agreements appearing in news headlines.

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